The New Zealand dollar fell against most major currencies as the looming US fiscal cliff sapped risk appetite, stoking demand for the greenback, and investors continued to unwind long positions in the kiwi and Australian dollars.

The New Zealand dollar fell to 81.76USc from 82.15USc in Asian trading yesterday. The trade-weighted index fell to 73.33 from 73.68.

President Barack Obama is set to return to Washington early Thursday (US time) as he attempts to forge an agreement between Democrats and Republicans to prevent about $US600 billion in tax increases and spending cuts from taking effect on January 1. As the deadline looms, the greenback has strengthened as investors are drawn back to the world's reserve currency.

"The fiscal cliff cannot be doing any favours" for growth-linked currencies such as the kiwi, said Tim Kelleher, head of institutional FX sales at ASB Institutional. The kiwi has also fallen amid "a continuation of the unwinding of long positions," he said.

A long position is a bet a security or currency is set to rise. The kiwi dollar was "overheated" when it topped 84USc in mid-December, he said. Still, the currency should find support around 81.50USc because exporters "are pretty happy to buy back down here."

The kiwi dollar traded at ¥70.05 from ¥70.08 late yesterday.

Japan's next finance minister, Taro Aso, reportedly said the government was looking at comprehensive measures to counter the yen's strength.

The kiwi fell to 50.70p from 50.90p and dropped to €0.61.82 from €0.62.20. It declined to 78.85Ac from 79.29Ac.